| A | B |
|---|
| Logistics | the process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption |
| Logistics Information Systems | The link that connects all of the logistics functions of the supply chain |
| Supply Chain Team | an entire group of individuals who orchestrate the movement of goods, services, and information form the source to the consumer |
| What are the 6 logistical components of the supply chain? | 1. Sourcing and Procurement of raw materials and supplies 2. Production Scheduling 3. Order Processing 4. Inventory Control 5. Warehousing and materials-handling 6. Transportation |
| Sourcing and Procurement | Objective: Obtain needed supplies in right quality at the lowest cost while developing long term relationships with suppliers |
| Production Scheduling | Determining the method and timing of the manufacturing of a mix of products. IE Build to stock (push) vs. build to order (pull) |
| Mass Customization (build-to-order) | a production method whereby products are not made until an order is placed by the customer; products are made according to customer specifications |
| Just-In-Time "JIT" (Lean Production) | a process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials right when they are needed on the production line |
| Order Processing | A system for quickly and easily receiving orders and accurately and quickly filling them |
| Order Processing System | a system whereby orders are entered into the supply chain and filled |
| Electronic Data Interchange (EDI) | information technology that replaces the paper documents that usually accompany business transactions, such as purchase orders and invoices, with electronic transmission of the needed information to reduce inventory levels, improve cash flow, streamline operations, and increased the speed and accuracy of information transmission |
| Vendor Managed Inventory (VMI) | Vendors process retailer data and then they decide when to ship products to them |
| Efficient consumer response programs | Ensure the right products are on the shelf, in the right styles and colors, at the right time, through improved inventory, ordering, and distribution techniques |
| Inventory Control | Maintaining the correct amount of inventory; The goal is the meet product availability standards while keeping costs low |
| Inventory Control System | a method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer's or a customer's demand |
| Material Requirement Planning (MRP) | an inventory control system that manages the replenishment of raw materials, supplies, and components from the supplier to the manufacturer |
| Distribution Resource Planning (DRP) | an inventory control system that manages the replenishment of goods from the manufacturer to the final consumer |
| Warehousing and Materials-Handling | Moving Products within a facility; receiving, sorting, storing, finding, getting ready for shipment; Goal is to minimizes the number of "touches" within a warehouse |
| Materials-Handling System | a method of moving inventory into, within, and out of the warehouse |
| Average Cost per "touch" or move within your facility? | Up to $25 per move |
| Dedicated Storage | Type of storage method within one's warehouse where you have assigned spots for each item. This makes items easy to locate, but overall you are much less flexible |
| Random Storage | Type of storage method within one's warehouse where you put things wherever there is space; this improve flexibility and efficiency but requires a good information system to remind you where you placed your products |
| Transportation | Typically accounts for 5-10% of the price of goods. Five major modes include: railroads, motor carriers, pipelines, water transportation, pipelines, and airways. |
| Criteria for transportation | Cost, transit time, reliability, capability, accessibility, and traceability |
| Which form of transportation moves the highest volume of freight? | Railroads |
| Trends in Supply Chain Management | 1. Advanced Computer Technology (RFID) 2. Outsourcing of Logistics Functions (3PLs) 3. Electronic Distribution |
| Outsourcing (Contract Logistics) | A manufacturer's or supplier's use of an independent third party to manage an entire function of the logistics system, such as transportation, warehousing, or order processing |
| RFID | Radio frequency identification tags used in pallet shipments |
| 3PLs | 3rd Party Logistics Providers - handle logistics for companies that only want to manufacture and not distribute themselves. |
| Electronic Distribution | a distribution technique that includes any kind of product or service that can be distributed electronically, whether over traditional forms such as fiber-optic cable or through satellite transmission of electronic signals Examples: iTunes, eTrade, Movies.com |
| Relationship of logistics to marketing mix | 1. Product characteristics can significantly impact logistics costs (Saturn shortened it's car) 2. Logistics must be aware of upcoming promotions 3. Effective Logistics can reduce prices or increase revenue |
| Saturn's Logistics Story | Shortened the actual length of their car by a few inches and saved 17% on logistics costs |
| Ford's Sourcing and Procurement Issues | The Ford Tarus was the #1 selling car for a while, but its plant had to be shut down for a week because of quality issues with gears from a vendor. They had no inventory on hand and were forced to shut down. |
| How much does and RFID tag currently cost? | About 50 cents |
